David Thodey
is quoting
Benjamin Netanyahu
– but it has nothing to do with the permanent conflict in the Middle East. Instead it’s about Israel’s extraordinary success in becoming a nation of innovation and serial entrepreneurship.

Telstra
’s CEO wants Australia to adopt more of the attitudes and approaches that have made Israel – with a population of only eight million – such a technology hotbed. A country where the plethora of start-ups and high tech patents is now integral to its growth, completely outplaying countries with many times its population.

Telstra’s many critics will point out Thodey runs a company more often denigrated as the 800-pound gorilla of the telco industry that has helped quash competition and innovation over decades. That doesn’t stop Thodey insisting he wants Telstra to be known as a great Australian technology company rather than the incumbent telco. His vision includes Telstra encouraging and investing in local start-ups and tech companies as well as constantly improving its own digital processes and technology.

He will obviously take a while to sell that message to Telstra investors and customers. They tend to be far more interested in today’s share price or the price and speed of broadband or why they are still waiting for a technician to arrive.

But Thodey used a speech in Sydney to the Australian Israel Chamber of Commerce on Monday to also push a broader message about the Australian economy. Companies, he says, have no choice but to develop a far richer culture of innovation in technology and in digitising their businesses if the country and the companies are not to be left behind.

In the Australian idiom, that’s what could be politely called “a no-brainer". But the willingness and ability of business to translate that simple thought into practice never seem to quite match. Even as the need becomes more urgent.

The surge in job ads in February, according to the ANZ monthly series, will temporarily assuage some of the fears about steadily rising unemployment. But the political argument over developing well paid jobs of the future as part of a national panic about manufacturing losses won’t disappear. So it’s important for business leaders to suggest where they see obvious gaps to be filled to boost economic growth and the ability to adapt to global trends.

Such a debate is also too rare in Australian business. Too few executives are willing to speak beyond their individual company concerns, compounding a cultural tendency to wait for government to provide answers to problems and then complain these are not good enough.

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Collaboration one reason for Israel’s success

As chief executive of Telstra, Thodey’s views on innovation and the advance of the digital economy are always going to attract accusations of self interest – or criticism he should focus attention on improving customer service. He will argue, of course, that he is doing just that, including by much greater use of new digital technology. He also concedes that it’s hard work and that Telstra is probably only 10 per cent of the way to becoming a truly digitised business in both innovation and process.

None of this detracts from his message that Australia has not been good enough at creating the necessary partnerships between the private sector and education and research institutions. That sort of close collaboration is certainly one of the reasons for Israel’s success.

As Thodey points out, this is not just a matter of businesses sponsoring a university chair or funding research, but of forming real partnerships.

Australia, he says, should also concentrate on more innovation in specific industries where it has a comparative advantage – such as mining and agriculture. Much of this technical expertise and unique skills already exists, especially in mining. But there’s still not enough of it and not enough exporting it.

More generally, Thodey blames a culture that doesn’t sufficiently celebrate science and technology and education while being quick to condemn failure in business rather than accepting it as invaluable experience for next time.

That leads to the lack of an entrepreneurial culture in Australia despite the wealth of talented individuals and ideas and skills. It just doesn’t all come together often enough, especially for those who want to stay rather than move offshore.

This failing applies to large companies as well as small businesses.

As Thodey says, science and technology can never be enough without the ingredient of entrepreneurship. And he views this as a problem of attitude rather than any specific issues like a lack of venture capital or Labor’s changes to the taxation of share options discouraging start-ups.

So while he says Australians are early and enthusiastic adapters of new technology, it tends to be that of other countries rather than anything domestically generated.

That customer preference for internationally proven technology over homegrown is not all bad, of course – as some of Telstra’s customers who’ve used its products can attest. Who can forget Telstra’s T-hub, for example, which combined a fixed phone and the internet and really just produced frustration?

Technology has, thankfully, kept on innovating. Along with attitudes at Telstra. Thodey insists he welcomes companies such as Google and Facebook What’s App in creating value for customers – not to mention driving usage of Telstra’s network. There’s no point, he says, in trying to fight changing consumer habits to defend the past. Instead, a company has to get ahead of what’s happening. It’s called innovation. Try it.